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The explosion of policies gives fiscal policy the absolute expansion intent to achieve full employment. What is achieved by the movement of the aggregate supply and the aggregate demand when full - employment goal is being targeted?
On a steady increase by the aggregate supply, the aggregate demand curve shifts to the right and passes the aggregate supply. So, in any recessionary equilibrium, the policy goal is to increase output to full employment.
Now, here - Keynes urges operatives within government to use its tax and spending power to shift the Aggregate Demand curve rightward. The GDP Gap will cause prices not to rise when the economy would expand succintly henceforth. Is it today's world economy?
